2015-07-23

The office of the Parliamentary Budget Officer (PBO), which has a mandate to provide independent analysis to lawmakers, issued the report as Canada prepares for an Oct. 19 election.

The federal Conservative government's stewardship of the economy has become a central issue as the election approaches, with the finance minister pledging to eke out a budget surplus this year despite a hit from weaker prices for oil, a major Canadian export.

"Federal government net debt is on a sustainable path and will be eliminated entirely in 35 years," said the PBO report, based on the assumption that current trends hold.

This would mean running budget surpluses eventually, which it projects as possible without tax hikes or cutting spending.

But that comes with bad news for the NDP-lovers, of course.

But health spending by the provinces is widely expected to rise faster than that level as the baby-boomer generation retires and lifespans lengthen.

"Subnational governments cannot meet the challenges of population aging under current policy," the report said.

It estimated that "permanent policy actions" amounting to 1.4% of gross domestic product will be needed to put subnational government debt on a sustainable path. These actions could entail higher provincial or municipal taxes or spending cuts elsewhere, or higher transfers from Ottawa.

Related: Alberta's debt after a slew of left-wing Premiers culminating with far-left Rachel Arab is $11.9B and climbing fast, even before she wastes huge amounts of public service money on lazy teachers and nurses.